The Euro declined anew after the release of worse than expected Euro area and Eurozone Manufacturing and Services PMI’s. The European Union failed to agree on a much-needed rescue package which creates uncertainty. Currencies hate uncertainty. German Chancellor Angela Merkel signalled that she is open to a large financial support package worth EUR 2 trillion but wants to see how it would be used before committing. French President Emmanuel Macron wants funds to be transferred to the hardest hit regions and not just loans. Reuters reported Macron said that “disagreements over the size and the shape of the rescue package persisted.”
EUR/USD slid to 1.07560 before climbing to settle at 1.0777, a loss of 0.30% (1.0820 yesterday). EUR/USD has immediate resistance at 1.0830 followed by 1.0880. Immediate support can be found at 1.0750 and 1.0720. The next direction for the Euro will depend on where the US Dollar heads. Meantime the lack of an agreement among European leaders on a rescue package which is urgently needed will weigh on the shared currency. Look for a likely trade of 1.0750-1.0850. Prefer to sell into strength.